Student loan borrower arrested at NZ border for overdue repayments, IRD says a ‘last resort’
Details released to the Weekend Herald under the Official Information Act show the latest arrest happened last year.
Use of the hardline power is rare - there was only one arrest in 2022 - and has continued despite Prime Minister Chris Hipkins’ past reservations about the policy.
There were no arrests in 2021, and two in 2020.
New Zealand’s borders shut in March 2020 in an effort to keep out Covid-19, with a Managed Isolation and Quarantine (MIQ) system subsequently brought in. Borders reopened in phases last year.
The arrest policy was introduced under National in March 2014.
The first arrest happened in January 2016, when Cook Islander Ngatokotoru Puna was stopped as he tried to leave New Zealand.
Puna’s $40,000 loan had ballooned to about $130,000. He said collection letters went to the wrong address, and had to repay thousands before authorities agreed to him returning home.
There have now been a total of 11 border arrests.
Inland Revenue is responsible for chasing up overdue student loan debt, and its commissioner applies for the arrest warrants.
The department told the Weekend Herald that arresting someone at the border as they try to leave New Zealand is a “last resort after all other avenues to secure payment have been exhausted”.
“Inland Revenue will always try to work with our customers directly before pursuing legal action. There are relief options available to help manage repayments for those who are in a position of hardship.”
The amounts of overdue repayments at the time of arrest (not the loan balance) ranged from $15,000 to $90,000. Those arrested were aged from 30 to 55.
All those arrested either paid or reached a repayment agreement.
Inland Revenue declined to say how many overseas-based borrowers were having their travel movements monitored for possible arrest, reasoning “release of this information could adversely affect the integrity of the tax system”.
People with overdue repayments were sent statements and notices, Inland Revenue said, “including information on the range of possible collection actions”.
“We also increase attempts to contact overseas-based borrowers when we know they are in New Zealand and encourage them to contact us to sort out their student loan debt before they leave.”
More than 77,000 overseas student loan borrowers have overdue repayments. The average amount outstanding is $24,135.
New Zealand-based borrowers are largely salary and wage earners, who have deductions made through PAYE. Only 5 per cent of borrowers in Aotearoa have overdue repayments, compared with 75 per cent of overseas-based borrowers.
Student unions have criticised the border arrest policy as draconian and likely to make overseas Kiwis “student-loan refugees” - unable to return home for weddings, funerals or other important events.
The Green Party is also opposed to the policy, but Labour is happy with it - Education Minister Jan Tinetti confirmed to the Weekend Herald “there are no plans to review the policy, change it or end its use”.
“My officials advise me only a small number of the most non-compliant borrowers are affected by this policy, and it is used as a last resort,” Tinetti said.
“It’s also worth mentioning that hardship provisions are available to those who cannot afford to pay, which means this sanction will only apply to those who could pay but refuse to do so.”
In 2018 Hipkins, then education minister, expressed concerns about the threat of arrest, telling Newshub it “sometimes exacerbates the situation, because it means those people never come home - sometimes you’re better to get them home then into an arrangement where they can start making payments”.
That same year, Labour introduced a flagship policy to pay for the first year of tertiary education. It was to be expanded to cover the first three years, but this was suspended in 2020, largely due to the impact of Covid-19 and the need to reprioritise spending.
Border arrests
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Eleven people have now been arrested at the border because of overdue student loan debt
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2022: 1 arrest
2021: 0 arrests
2020: 2 arrests
2019: 2 arrests
2018: 2 arrests
2017: 1 arrest
2016: 3 arrests
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Police are investigating after a bus driver was allegedly punched in the face and "had some teeth knocked" out in Avondale.
Police said it was alerted to the incident at about 10.17am yesterday.
"The driver received facial injuries and was transported to hospital," a spokesperson said.
"Police are making inquiries into the assault to identify those involved."
Tramways Union president Gary Froggatt said the driver was allegedly punched in the face by a passenger.
Froggatt wanted more to be done about "issues like this".
"I realise you can't have a policeman on every bus, but the drivers and the unions seem to be left out of the conversation.
"He's in hospital getting stitches put in his knee. He had his teeth knocked out," he said.
Froggatt said he got "about three or four calls like this" from drivers a month.
"I feel for the family, the drivers should be able to go to work and go home safe."
Auckland Transport said it was aware of the incident and assisting police with their investigation.
Group manager of public transport operations Rachel Cara said the bus operator was ensuring the driver has the support they need.
"We operate over 13,000 bus services every weekday and fortunately the majority of our passengers are amazing, but these isolated incidents are concerning.
"Our bus drivers work tirelessly to keep Aucklanders moving and deserve to feel safe in their place of work.
"We continue to work closely with police, other agencies and communities to improve safety on public transport."
Police urged witnesses to call 105.
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